One of California’s largest unions has called for a one-time 5% tax on the net worth of California’s billionaires. This initiative is helping to fill a large gap left by severe cuts in federal funding that have decimated health care services for the low-income residents. The proposal comes at a remarkably opportune time for Californians. Thousands of people might soon see a sudden and steep increase in their personal healthcare expenses because of changes to federal policy.
Governor Gavin Newsom has been historically opposed to tax increases, particularly on the rich. Now, he is under new pressure as California is beginning to feel the sting of the loss of that fed funds. This new tax is a direct reaction to the federally mandated law, which was signed by former President Donald Trump. It’s projected to reduce more than $1 trillion from Medicaid and federal food assistance programs over the next 10 years.
The union’s proposal is short more than 870K signatures. They need to gather these by next spring to make the November 2026 ballot. Approval from California Attorney General Rob Bonta is needed first, and only then could the union start collecting signatures. They have, in fact, already filed a request for this approval—indicative, perhaps, of the urgency of their transformative mission.
As the union goes out ahead with its cuts, we’re asking experts to weigh in on the likely consequences of these cuts. Emmanuel Saez, an economist at the University of California at Berkeley. Here’s his take on the burden being placed on the state’s richest of the rich.
“We hope that some and perhaps hopefully a large number of billionaires will recognize that it’s important in the state where they’ve grown their fortune that they have a responsibility to society to preserve the future of California.” – Emmanuel Saez
The prospect of cuts to healthcare funding has been especially alarming for advocates advocating on behalf of low-income communities. As SEIU-United Healthcare Workers West president Dave Regan spelled out, the stakes couldn’t be higher if we don’t act.
“If we do not do this, millions of people are going to lose health care, an untold number of people will go without treatment and there will be tragedy after tragedy.” – Dave Regan
Even Governor Newsom has started sounding the alarm bells about these federal cuts coming down the pike. He argues that Californians currently enrolled through Covered California will see their monthly health care costs almost double next year as a result of these changes.
“California has led the nation in expanding access to affordable health care, but Donald Trump is ripping it away.” – Gavin Newsom
The proposal is a historic departure from the traditional legislative and electoral approach to taxation and wealth redistribution in California. The union believes that taxing billionaires could not only mitigate the immediate impacts of federal cuts but help sustain California’s commitment to accessible health care.
